The Tax Publishers2020 TaxPub(DT) 4280 (Pune-Trib)

INCOME TAX ACT, 1961

Section 147

Where AO reopened case for bringing to tax income on account of deemed dividend under section 2(22)(e) that allegedly escaped assessment as was evident from the reasons recorded by AO, he was not justified in making addition on issue of unexplained cash credit under section 68, which did not form basis of reasons recorded by AO for reopening of assessments for both years under consideration.

Reassessment - Reopening of assessment on account of deemed dividend under section 2(22)(e) - Additions made on different grounds, i.e., unexplained cash credit under section 68 -

Assessee challenged validity of assessment order passed under section 143(3) read with section 147 by contending that AO failed to make any addition on grounds, on which assessment reopened.Held: AO reopened case for bringing to tax income on account of deemed dividend under section 2(22)(e) that allegedly escaped assessment as was evident from the reasons recorded by AO . However, no addition was finally made by AO under section 2(22)(e) and addition was made only on issue of unexplained cash credit under section 68 which did not form basis of reasons recorded by AO for reopening of assessments for both years under consideration. It was not open to AO independently to make addition under section 68 in the assessments completed under section 143(3) read with section 147 for both the years under consideration and the assessments so made by him without satisfying the requisite condition were liable to be cancelled being bad in law.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2006-07



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